September 2002 | Commentary | Carriers Corner

Container Carriers: Why Can't We Make Red Tape a Thing of the Past?

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Container shipping is one of the world's youngest industries—younger, in fact, than the computer industry. When Malcolm McLean drove the first container onto a ship less than 50 years ago, Big Blue was already churning out early computing and communication systems.

Despite the rapid evolution of computer technology, container shipping companies still fail to grasp and implement the very technology that can remove massive operating expenses from their industry, which desperately needs to reduce costs. Why do carriers need paper and faxed shipping instructions? Why is the same data keyed into systems multiple times via bookings and documentation systems? What makes it so tough for the industry to change?

A Systemic Problem

Carriers usually have 90 percent of the data they need from the original container booking. The customer calls the carrier and inputs the necessary information via telephone to a customer service representative, who then turns around and manually inputs the information into the carrier system. Then, nearer the time of vessel departure, shippers manually input this data into their systems, faxing or delivering printed shipping instructions to the ports. The information is then manually inputted into the carrier's documentation systems—even though more than 90 percent of the data already resides in the booking databases.

Get the point? Not only is the paper and fax process a massive manual task for every single vessel departure, 90 percent of these keystrokes are unnecessary. The data already resides in the system, or should I say systems. Therein lies another problem.

Over the past 50 years, container carriers have built their global processes and departments into silos. As a result, their systems are in silos. They have customer service departments with customer service systems. They have documentation departments with systems. More often than not, these departments, though parts of a greater whole, function with little or no integrated communication. Sometimes the systems don't speak to each other at all.

Having worked in this area, I can honestly say change is eminently possible. It's not that complex. If we want to change, we can. In the process, we may actually help the guys who pay our salaries—the shippers, who unfortunately have had to develop process silos to support carrier processes and international trade requirements.

We have made it all so cumbersome. An entire industry has grown up to support these middlemen. Freight forwarders, NVOCCs, 3PLs—even though they each play a significant and important role in specialty fields—make most of their profit from shippers who pay them simply to navigate the crazy data maze and manage the massive paper shuffle. Shippers don't want to touch it.

In fact, much of the current supply chain management revolution taking place right now in the United States has to do with eliminating information transfer redundancies in the system. Our New Economy is still growing, and it will be built on streamlined transactions and smooth information and documentation flow. Red tape is a thing of the past.

When the Ships Come In

I see no reason why this cannot work for every carrier. It's a matter of change, belief, and commitment to challenge the status quo and ridiculous multiple flows of data.

True eBusiness will become reality. It is not a matter of if, but when. I see a day very soon where new technology will automate live bookings and information flow system to system. This is something traditional EDI could never manage: integrated shipping systems using standard XML-based web services.

When we reach my ultimate dream, when the web reaches its full potential as a simple pathway for seamless data flow, we can all sit back with a nice malt scotch and a cigar, and watch the systems run our business.

Someone still needs to pilot the ships. But we can meet them in the pub shoreside when they reach port.

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